Korn Ferry Stock Gains After Q2 Beat, Solid Q3 Outlook

Korn Ferry KFY reported second-quarter FY22 total revenue growth of 47% year-over-year to $643.4 million, beating the consensus of $604.66 million. Fee revenue of $639.4 million increased 47% Y/Y and 9% sequentially.
Adjusted EPS improved to $1.53 from $0.54 in 2Q21, beating the consensus of $1.37.
Operating income was $103.8 million versus $48.2 million in 2Q21 and the margin expanded by 512 bps to 16.2%.
Adjusted EBITDA was $134.9 million, compared to $66.2 million in 2Q21, and margin expanded by 585 bps to 21.1%.
Revenue by line of business: Consulting $165.7 million (+30.4% Y/Y), Digital $88.7 million (+18.2% Y/Y), Executive Search $236.5 million (+59% Y/Y) and RPO and Professional Search $152.5 million (+75% Y/Y).
The company declared a quarterly dividend of $0.12 per share on December 7, 2021, payable on January 14, 2022, to stockholders of record on December 21, 2021.
Q3 Outlook: Korn Ferry expects fee revenue of $640 million - $660 million and EPS of $1.38 to $1.56.
It expects an adjusted EPS of $1.42 - $1.58 versus the consensus of $1.10.
Price Action: KFY shares traded higher by 6.28% at $80 during the premarket session on Wednesday.

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